UK inflation unexpectedly spikes on higher clothing costs

Official figures show that inflation in Britain unexpectedly rose in August to a six-month high as clothing and transport costs rose sharply.

The Office for National Statistics said Wednesday that consumer price inflation was 2.7 percent in the year to August, up from the 2.5 percent rate recorded in the previous month. The consensus in financial markets had been that inflation would actually dip to 2.4 percent.

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The rise is a blow to households across Britain, given that the spike has come alongside another increase in interest rates. In spite of the inflation rise, the Bank of England is not expected to lift interest rates again in the near future given uncertainty surrounding Britain's looming exit from the European Union.